Yet another Uber lie has been exposed; the ride sharing service’s drivers don’t make $74,000 a year. A recent survey by Uber itself determined that the average Uber driver would have to work 80 hours a week to make that amount, The Washington Post reported.
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An analysis of the Labor Market for Uber drivers prepared by Uber itself and Princeton economist Alan Krueger found that the average driver makes around $19 an hour after Uber’s 20% commission. Since the Uber driver has to pay for gas, the car, insurance, tires, and maintenance out of that money, the pay rate is probably around $10 an hour.
That means some Uber drivers might be making less than the burger flippers at McDonald’s. Note this survey only covered the money the drivers get through Uber; it does not cover any cash tips that they are pocketing.
Debt Peonage Uber Style
Nor does the survey encompass other expenses Uber drivers might incur; for example, getting somebody to do their taxes for them. Uber recently partner with Intuit to give its drivers access to QuickBooks Online Self Employed, a cloud-based tax and accounting solution for freelancers. Uber probably had to do this in order to avoid attention from the IRS.
Another expense not included is the cost of financing a vehicle to drive for Uber. BuzzFeed news exposed an Uber auto-financing scheme that sounds a great deal like debt peonage. In the program, a man named Scott Eddy was given a $66,000 loan to pay for a Toyota Avalon car valued at $41,000. According to BuzzFeed, Mr. Eddy would have to pay $1,200 to a month to cover the cost of the vehicle. What’s worse is that the payments would come out of the money from Uber fares.
Instead of freedom, Uber seems to be saddling Mr. Eddy with a pile of debt. Worse, to get the car, Eddy had to sign an agreement obligating him to work for Uber; if he stopped working for Uber, Eddy would lose the vehicle. That means he couldn’t change jobs or do something else; he would have to work for Uber until the car is paid off. One has to question a company that would do that to its “driver partners.”
Nor is that the only fee you might to have to pay to Uber; The Washington Post reported that its drivers can rent an iPhone from Uber for $10 a week or $40 a month. Uber, it seems, is a very creative company at gouging and exploiting its drivers.
Then, of course, there is insurance liability; Uber has been caught telling drivers they didn’t need to get livery insurance, which is designed for cab and limo drivers. Instead they were assured they could use regular auto insurance that might not cover accidents while driving for Uber.
Is Uber a Predatory Company?
Instead of providing economic freedom, Uber might be a trap of debt and drudgery for the working class. It looks as if Uber is a predatory company cashing in on growing income inequality and desperate Americans willing to do anything to generate income rather than a cutting edge transportation solution.
That’s disturbing as Uber expands and, worse, governments start to cash in on it. Virginia Governor Terry McAuliffe, a Democrat, announced that Uber and Lyft can operate in his state as long as each company pays a $100,000 license fee, The Washington Post reported. Uber will also have to provide $1 million in liability insurance for its drivers. Guess where the premium for that insurance is going to come from—the drivers’ fares.
Uber, it seems, has been exposed as simply too good to be true. It looks more like a bad deal for drivers than a ticket to freedom and the middle class.